Africa/Global: Fossil-Fuel Divestment

Editor's Note

The fossil-fuel divestment movement now gaining momentum
on college campuses to fight climate change frequently
evokes the precedent of the anti-apartheid divestment
campaigns of the 1970s and 1980s. But there are other
Africa connections that are also beginning to be made.
Africa is the continent most vulnerable to climate change
and extreme weather events. American and other
multinational companies have a long history of
environmental destruction in areas such as the Niger
Delta. And while many African countries look to fossilfuel
exploitation to fund their development, the
experience of the "resource curse" shows that the profits
may fuel gross inequality and capital flight rather than
development.

The range of issues involved is far too wide to be
explored briefly. But it is essential to begin
systematically making such connections. There is no doubt
that both here and in Africa, our economies will depend
on fossil fuels for some time to come. But delaying the
transition away from such dependence not only endangers
future generations. Its damaging effects, not entering
into the profit-and-loss balances of corporations, are
already costing lives through multiple causal chains in
many places.

This AfricaFocus Bulletin contains excerpts from "The
Case for Fossil-Fuel Divestment," by Bill McKibben in
Rolling Stone, February 22, 2013 and a blog post by
Marissa Moorman from the Africa is a Country blog on
March 4 entitled "Oil in the Angolan President's Family."

The Case for Fossil-Fuel Divestment

On the road with the new generation of college activists
fighting for the environment

It's obvious how this should end. You've got the richest
industry on earth, fossil fuel, up against some college
kids, some professors, a few environmentalists, a few
brave scientists.

And it's worse than that. The college students want their
universities to divest from fossil fuel ' to sell off
their stock in Exxon and Shell and the rest in an effort
to combat global warming. But those universities, and
their boards, have deep ties to the one percent:
combined, their endowments are worth $400 billion, and at
Harvard, say, the five folks who run the portfolio make
as much money as the entire faculty combined.

Oh, and remember ' this is supposed to be an apathetic
college generation. The veteran leader Ralph Nader, in a
speech in Boston last year, said kids today were more
passive than any he'd seen in 45 years. "Nothing changes
if you don't have fire in your belly," he said. "You are
a generation without even embers in your belly."

Is Congress Finally Moving on Climate Change?

But here's my bet: the kids are going to win, and when
they do, it's going to matter. In fact, with Washington
blocked, campuses are suddenly a front line in the
climate fight ' a place to stand up to a status quo that
is wrecking the planet. The campaign to demand divestment
from fossil fuel stock emerged from nowhere in late fall
to suddenly become the largest student movement in
decades. Already it's drawing widespread media attention;
already churches and city governments are joining
students in the fight. It's where the action all of a
sudden is.

...

We even had some early victories. Three colleges ' Unity
in Maine, Hampshire in Massachusetts and Sterling College
in Vermont ' purged their portfolios of fossil fuel
stocks. Three days before Christmas, Seattle mayor Mike
McGinn announced city funds would no longer be invested
in fossil fuel companies, and asked the heads of the
city's pension fund to follow his lead. Citing the rising
sea levels that threatened city's neighborhoods, he said,
"I believe that Seattle ought to discourage these
companies from extracting that fossil fuel, and divesting
the pension fund from these companies is one way we can
do that."

The logic of divestment couldn't be simpler: if it's
wrong to wreck the climate, it's wrong to profit from
that wreckage. The fossil fuel industry, as I showed in
Rolling Stone last summer, has five times as much carbon
in its reserves as even the most conservative governments
on earth say is safe to burn ' but on the current course,
it will be burned, tanking the planet. The hope is that
divestment is one way to weaken those companies '
financially, but even more politically. If institutions
like colleges and churches turn them into pariahs, their
two-decade old chokehold on politics in DC and other
capitals will start to slip. Think about, for instance,
the waning influence of the tobacco lobby ' or the fact
that the firm making Bushmaster rifles shut down within
days of the Newtown massacre, after the California
Teachers Pension Fund demanded the change. "Many of
America's leading institutions are dozing on the issue of
climate," says Robert Massie, head of the New Economics
Institute. "The fossil fuel divestment campaign must
become the early morning trumpet call that summons us all
to our feet."

It won't be an easy fight in most places, of course. At
Harvard, say, 72 percent of the student body voted to
demand divestment, only to have the university respond in
the most patronizing possible fashion two days later: "We
always appreciate hearing from students about their
viewpoints, but Harvard is not considering divesting from
companies related to fossil fuels." But one of the
Harvard student organizers responded with just the right
mix of pepper and politeness: "The president is going to
have to change her mind, because we're not changing
ours," sophomore Alli Welton said. "Climate change is a
matter of life or death for millions and millions of
people."

And it's that simple truth that, over the next few
semesters, will help students overwhelm boards of
trustees and reluctant presidents. This movement didn't
come out of nowhere, after all ' despite Nader's
pessimism, if you knew where to look, you could see the
pot boiling for several years. On hundreds of campuses,
students had persuaded their administrations to build
green buildings and bike paths; tens of thousands of
students had traveled to Washington for giant Powershift
conventions to learn how to lobby on global warming. And
since there's no longer anything theoretical about
climate change, this movement's not going to dissipate '
with each new storm and drought, it will gain tragic
power.

In fact, if you sit down and game out the future, you
start to realize that students, faculty, and engaged
alumni have a surprisingly good hand. Trustees and
presidents may resist at first ' they are, almost by
definition, pillars of the status quo. But universities,
in the end, are one of the few places in our civilization
where reason still stands a good chance of prevailing
over power (especially since students are establishing
some power of their own as they organize). And here's
where reason inevitably leads:

1) Universities need to lead because they are where we
first found out about climate change. It was in physics
labs and on university supercomputers that the
realization we were in trouble first dawned a generation
ago. By this point the proverbial man in the street can
see their predictions coming sadly true: It wasn't just
Sandy, though there's no doubt that the image of the cold
Atlantic pouring into the New York subways had imprinted
the new fragility of western civilization on many minds.
(If that radical rag Business Week used the headline
"It's Global Warming, Stupid," then you knew the message
was getting through.) ...

All this means that climate is no longer a fringe
concern. Seventy-four percent of Americans said global
warming was affecting the weather. On campus, opinion is
near-unanimous. "For one of my classes I just did a
poll," says Stanford freshman Sophie Harrison, a leader
in the divestment fight. "Out of 200 people I only found
three who didn't believe in climate change."

Meanwhile, the scientists keep pushing their research
forward. Twenty-five years ago, they were predicting the
trouble we're seeing now; when they look forward another
quarter century, things get truly scary ' and academics
get much less academic. In the past, just a lonely few,
like NASA's James Hansen, were willing to go to jail, but
in November, the premier scientific journal, Nature,
published a commentary urging all climate scientists to
"be arrested if necessary" because "this is not only the
crisis of your lives ' it is also the crisis of our
species' existence." ...

So when, for instance, Harvard president Drew Gilpin
Faust says "our most effective impact on climate change"
will come from "what we do with our teaching, our
research. . . the students who may be the heads of the
EPA or all kinds of organizations," it's partly true '
that scholarship is important. But it's also clearly not
doing the job alone, since the temperature keeps going
up.

...

if you're committed to greening your campus, why wouldn't
you be committed to greening your portfolio, too? Why is
the heating system for the new arts center a proper
target for environmental concern, but not the $50 million
sitting in Peabody Coal, where it helps support climatedenying
think tanks and reality-denying Congressmen?

Hence divestment. ... The fossil fuel industry, though '
its existence is fundamentally against our existence. We
can't change them by investing in them, because they're
not going to write off reserves. There's no way they can
be made sustainable, in the same way tobacco can't be
made healthy."

2) Universities understand math, and in this case the
math about who's to blame is Q.E.D. clear. It points
straight at the fossil fuel companies.

...

It's not as if all of us who use fossil fuel aren't
implicated ' flying to Florida for spring break fills the
sky with carbon. But it's only the fossil fuel industry
that lobbies round the clock to make sure nothing ever
changes. "We've figured out the root of the problem by
this point," says Maura Cowley, who as head of the Energy
Action Coalition has been coordinating student
environmental efforts for years. Individual action
matters, but systemic change ' things like a serious
price on carbon that the industry has blocked for years '
is all that can really turn the tide in the short window
the science of climate still leaves open. "Going after
them directly feels seriously good," says Cowley.

3) Faced with this kind of irrefutable evidence, colleges
have led in the past, conceding that their endowments, in
extreme cases, can't seek merely to maximize returns.

In the 1980s, 156 colleges divested from companies that
did business in apartheid South Africa, a stand that
Nelson Mandela credited with providing a great boost to
the liberation struggle. "I remember those days well,"
says James Powell, who served as president of Oberlin,
Franklin and Marshall, and Reed College. "Trustees at
first said our only job was to maximize returns, that we
don't do anything else. They had to be persuaded there
were some practices colleges simply shouldn't be
associated with, things that involved the oppression of
people."

Since then, colleges have taken stances with their
endowments on issues from Sudan to sweatshops. When
Harvard divested from tobacco stocks in 1990, thenpresident
Derek Bok said the university did not want "to
be associated with companies whose products create a
substantial and unjustifiable risk of harm to other human
beings." Given that the most recent data indicates fossil
fuel pollution could kill 100 million by 2030, the coal,
oil and gas industry would seem to pass that test pretty
easily; it's also on the edge of setting off the 6th
great extinction crisis, so everyone over in the biology
lab studying non-human beings has a stake too. Here's how
Desmond Tutu, Mandela's partner in the liberation of
South Africa, put it in a video he made for the DotheMath
tour: "The corporations understood the logic of money
even when they weren't swayed by the dictates of
morality," the Nobel Peace Prize-winner explained.
"Climate change is a deeply moral issue, too, of course.
Here in Africa, we see the dreadful suffering of people
from worsening drought, from rising food prices, from
floods, even though they've done nothing to cause the
situation. Once again, we can join together as a world
and put pressure where it counts." Or, you know, not.

4) And it's not just people at a distance who are in
trouble here, though so far they've borne the brunt '
young people, the kind of people you mostly find on
campuses, are the next chief victims of climate change.

...

5) And in this case, they can do the right thing without
great cost.

College trustees, of course, are thinking about their
endowments. They worry that they'll lose money if they do
divest ' that if they can't park their money in Exxon et
al., their yields may dwindle.

The fear is almost certainly overstated ' energy stocks
have outperformed the market index the last few years,
but lag if you take the last 30 as a whole. ...

At some schools, some of the money can be re-invested in
the college itself ' in making the kind of green
improvements that save substantial sums. Mark Orlowski,
head of the Sustainable Endowments Institute, just
published a report showing that the average annual return
on investment for a thousand efficiency projects at
campuses across the country was just under 30 percent,
which makes the stock market look anemic. "College
trustees often think of a new lighting system as an
'expense,' not an investment, but it's not," he says. "If
you invest a million and can expect to clear $2.8 million
over the next decade, that's the definition of fiduciary
soundness." At colleges ' and elsewhere ' the potential
for significant reinvestment is large: the San Francisco
Board of Supervisors, for instance, is considering urging
its pension fund to divest a billion dollars. That could
do some serious re-greening.

...

So let's imagine for a moment that students and their
allies are able to convince many colleges and
universities to do the right thing. Especially for those
who sign on fairly quickly, and with a minimum of rancor,
there could be real advantages. "After we divested," said
Mulkey of Unity College, "we started receiving donations
online. We're seen an uptick in our inquiries from
students. I think that will transform into an improvement
in enrollment. That's not why we did it, but it's a
fact." Powell, recalling the moment when Oberlin divested
its apartheid stock, says, "I definitely feel it rallies
people behind their alma mater. ..."

That influence could be decisive, too. Less in financial
terms, though the $400 billion in American college
endowments is no small sum, than in political and
cultural ones. ... Fossil fuel companies care a lot about
image, after all ' it's what makes it easy for them to
exert their political control. It's why they run those
back-to-back-to-back TV ads about "clean coal," those
endless commercials with the polar bears and the drilling
rigs. Colleges could strip them of their social license,
and if they lead, others will follow. ...

Already, at least two major Christian denominations have
announced they'll consider resolutions to withdraw their
money. One could imagine the fossil fuel industry as the
new tobacco, humbled enough that it actually has to come
to the bargaining table in D.C. and a dozen other crucial
capitals.

...
It's not perhaps a militant generation ' maybe that was
what struck Nader, more used to the uprisings of the
1960s with their broad themes of cultural liberation. But
in the wake of Occupy, many young people are drawing
connections. "We want to make sure we don't just get
divestment, but that we build real political power across
wide coalitions," says Jones. And if you're a college
administrator, you should probably fear folks who know
how to use YouTube, Twitter and Facebook better than you
do; "militant" sounds good, but "persistent," "organized"
and "committed" are probably a deeper threat to the
status quo. And you can prove it by watching the same
students running divestment campaigns quickly joining the
larger environmental movement: all of a sudden, they're
helping run the opposition to the Keystone Pipeline, or
working hard with their Appalachian allies in the fight
against mountaintop removal coal mining.

The fossil fuel industry may be dominant in the larger
world, but on campus, it's coming up against some of its
first effective opposition. Global warming has become a
key topic in every discipline from theology to psychology
to accounting, from engineering and anthropology to
political science. It's the greatest intellectual and
moral problem in human history ' which, if you think
about it, is precisely the reason we have colleges and
universities.

Oil in the Angolan President's Family: Keeping it Global

A few months late to this story, the Wall Street Journal
published a piece last Wednesday entitled â€œAngola Wealth
Fund is Family Affair." This was widely reported in the
international press back in the fall when the Fundo
Soberano de Angola was officially announced. The Fund,
started with $5 billion, now puts Angola in line with
other OPEC nations, which also have funds to protect
against oil price volatility, to secure the future when
oil runs out, to build infrastructure, and/or to
diversify the economy. Angola could use all these.
According to one prominent member of the board, the
emphasis will be on diversification and wealth creation.

The FSDEA has a three person board, which includes José
Filomeno de Sousa Santos, one of Angolan President José
Eduardo dos Santos's sons, known by his nickname ZenÃº.
ZenÃº is 34 years old and was raised primarily in
Switzerland and England. He has a Master's degree in
information management and finance from Westminster
University in London and worked at the AAA insurance
company in Luanda (currently in financial crisis), part
of Sonangol's network of companies.

FSDEA values include: transparency, accountability,
commitment, and integrity. The Wall Street Journal quotes
the World Bank economist Marcelo Giugale who says that â€œA
sovereign-wealth fund is a huge signal of discipline."
Many Angolans and Angola observers have their doubts.

The local and international press have voiced some of
those concerns. Mihaela Webba, a constitutional law
specialist and advisor to opposition party UNITA
president Isaias Samakuva, told Voice of America that the
National Assembly is the only legitimate body to run such
a fund and that the Fund's creation was a violation of
Angola's Constitutional Law. Open Society director Elias
Isaac launched a similar criticism to Deutsche Welle
questioning whether such a fund could be created by
presidential decree. And CASA-CE president Abel
Chivukuvuku said he was skeptical that ZenÃº was the only
person in the country qualified for the position.
Makaangola did investigative work on the Swiss investment
firm that will manage the Fund: Quantum Global and its
Swiss-Angolan associate, and friend of ZenÃº, Jean-Claude
Bastos Morais. Together Dos Santos and Morais started the
investment bank Banco Kwanza Invest.

In the wake of ZenÃº's appointment to the FSDEA board,
rumors have begun to circulate that the President intends
to tap him as a successor. Manuel Vicente, the current
Vice President, was the head of Sonangol and his new
political prominence already caused much grumbling in the
MPLA party headquarters for the same reason. But
succession is for monarchs and the concerns around the
Sovereign Fund again recall the ways in which President
dos Santos acts more like a sovereign than a popularly
elected official. For example, he has centralized power
in the executive branch with the 2010 Constitution that
removed the Prime Minister, gave the President the power
to appoint a Vice President, and made presidential
election indirect via the party ticket. One jurist
described the constitution's Presidential powers as like
those of Louis XIV. According to Freedom House, 90% of
all legislation is initiated in the executive branch. And
the President appoints and removes provincial governors
at will. Much has already been said here and by others
about the nepotistic mechanisms by which his children and
especially his first-born daughter, Isabel dos Santos,
have developed such robust and lucrative business
portfolios.

We think there is something else to think about too. All
of this sounds strangely familiar. All of this adds up to
the pat equation: FSDEA + ZenÃº x Transparency
International coefficient Ã· 100,000 barrels = oil curse.

But what about those of us who consume oil and petroleum
products? And those of us who prop up governments that
produce that oil? Anyone remember the story of the Cuban
troops protecting U.S. oil installations from U.S. backed
UNITA soldiers in Angola in the 1980s during the height
of their civil war and the Cold War, for example?

Scholarly work by University of Houston historian Kairn
Klieman on Nigeria (â€œU.S. Oil Companies, the Nigerian
Civil War, and the Origins of Opacity in the Nigerian Oil
Industry," Journal of American History, June 2012) and
Columbia University political theorist Timothy Mitchell's
recent book Carbon Democracy: Political Power in the Age
of Oil (Verso 2011), suggests that the oil curse story is
too one-sided. U.S. and other Western companies and
governments that help produce and consume and often build
infrastructure are also responsible for, and live the
political consequences of, dependency on oil. Opacity in
the Nigerian oil industry, Klieman argues, is a joint USNigerian
co-production dating to the 1960s. Meanwhile,
Mitchell asserts that in the late 19th century carbon
provided the very basis for mass democratic movements
while oil sets its limits in the 20th and 21st centuries.
We are all implicated, in other words.

We ought to ask questions about Angola's Sovereign Wealth
Fund. But we ought also to ask questions about the
history of Chevron, Exxon, and Conoco in Angola when the
oil industry was being established in the 1960s and the
U.S. airbase on the Azores kept us quiet about Portugal's
war in Angola. And we ought to wonder about current
policy too.

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